WORKING JOE vs. WELFARE JOE
- A Reality Check -

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(Posted online October 11, 2010)

Online awareness campaigns and petitions railing against injustice
are a daily occurrence now that we're all plugged in and networking.
Sometimes, however, those campaigns are ill-advised and based on disinformation.

"WORKING JOE vs. WELFARE
JOE" is the latest case of self-righteous indignation
founded on disinformation.
A visitor to my website forwarded this email to me last week asking if this
could possibly be true.

NOTE : Despite the title, the rant below isn't at all about how
well off people are on welfare compared to hard-working Canadians.
It's a lament about (1) people who rip off the income tax system
by hiring people and paying them under the table and (2) those people
who work under the table to avoid paying income tax. I agree totally
that people must declare ALL income from work under the Income Tax
Act. It's only fair.

It's nonetheless worth reviewing the facts in the scenario of Working
Joe and Welfare Joe to set the record straight and, hopefully, to
dissuade people who receive the message below in an email from spreading
this crap to an even larger audience. If you receive an email with
the (original) text below, feel free to refer the sender to this
page.

The complete original email that was being circulated is
copied below in regular (black) text.Comments in red are by me (Gilles), based on
30 years of research on Canadian welfare programs.

You have two families: "WORKING JOE " vs "WELFARE JOE".
Both families have two parents, two children, and they live in Canada.

Working Joe works in construction, has a Social Insurance Number and makes
$25.00 per hour with taxes deducted.
Welfare Joe does not work, has a Social Insurance Number, and gets paid
$15.00 per hour "without leaving the house".

[NOTE : The above statement didn't make any sense
to me, because welfare is not paid by the hour, and this is the first mention
of an hourly rate of pay that seems plucked out of thin air for someone
on welfare "without leaving the house". In fact, if you read the
text in the yellow box below, you'll see that the $15 is actually money
paid illegally under the table not to someone on OW, but to someone who
is not declaring their income.]

Ready? Now pay attention...
Working Joe : $25.00 per hour x 40 hours = $1000.00 per week, or $52,000.00
per year.
Now take 30% away for provincial and federal taxes.
Working Joe now has $31,231.00 net.

Working Joe makes $52,000 per year. The total
(fed+prov) income tax that Working Joe would pay with a spouse and two kids
in Ontario (where I live) in 2010 on $52,000 is $9,800 (or 18.8%, NOT 30%),
leaving him with $42,200 after income taxes, not $31,231 net.Source: http://lsminsurance.ca/calculators/canada/income-tax

Welfare Joe and his family would be in heaven,
relatively speaking, if their annual welfare income were even close to $31,200
per year. Welfare benefit levels are set by each provincial government;
in the most generous province (PEI), the annual income of a two-adult, two-child
household is $23,000 and that includes any extra federal benefits paid on
behalf of the kids. At the other end of the scale, the same family on welfare
in New Brunswick would have an annual income of $19,000. Even using the
higher figure, Welfare Joe's annual income would be $8,000 less than the
writer suggests.Source:http://tinyurl.com/2543sx7

October 16/10 update:

The statement regarding Welfare Joe getting paid $15.00 per hour
"without leaving the house" perplexed me, because NO Canadian
jurisdiction pays welfare on an hourly basis. When I Googled "WORKING
JOE vs WELFARE JOE", I found a whole whack of links to various
versions of this urban legend, including one called "Joe Legal
and Jose Illegal", where both families have two parents, two
children, and live in California. In this scenario,Jose
Illegal "works in construction, has NO Social Security Number,
and gets paid $15.00 [per hour] in cash under the table."

It appears that at some point in the life cycle of this urban legend,
someone decided to adapt the yarn to the Canadian welfare/working
poor context, but didn't bother explaining how someone could get
paid $15.00 per hour by welfare "without leaving the house".
In fact, the $15/hr isn't from welfare - it's from an unscrupulous
employer who pays Jose/Joe under the table. Thus did Jose Illegal
evolve into Welfare Joe, but the rest of the story is pretty much
plagiarized directly from the Jose Illegal text.

In fact, the rant isn't at all about how well off people are on
welfare compared to hard-working Canadians. It has nothing to do
with the amount of money a person makes on welfare compared with
the income of a working person. It's a lament about (1) people who
rip off the income tax system by hiring people and paying them under
the table and (2) those people who work under the table to avoid
paying income tax. I agree totally that people must declare ALL
income from work under the Income Tax Act. It's only fair.

Working Joe pays medical and dental insurance with limited coverage for
his family at $600.00 per month, or $7,200.00 per year.
Working Joe now has $24,031.00 net.
Welfare Joe has full medical and dental coverage through the Provincial
and local clinics at a cost of $0.00 per year.
Welfare Joe still has $31,200.00 net.

If Working Joe
is employed at $25 per hour, chances are pretty good that his construction
company offers subsidized or discounted health and dental insurance. If
Working Joe's employer *doesn't* offer
insurance AND if he wants total coverage for his family of four, Blue
Cross Ontario offers him the Cadillac package : Core Health, Prescription
Drugs, Dental and Hospital Benefits, for $428 monthly --- far more than
the limited coverage that's offered to households on welfare, and somewhat
less than the $600 suggested by the author of this rant..

Welfare Joe's
health benefits under Ontario Works (the provincial welfare program for
applicants without a disability) are summarized in the two following sections
of the Ontario Works Procedures manual:
* Summary of Benefits
* Health Benefits

Welfare Joe can't get even close to "full
medical and dental coverage".
The actual amount of medical and dental coverage varies from one municipality
to another in Ontario*, because much of that coverage falls under the category
of "discretionary". Municipalities can choose to offer less coverage,
or no coverage beyond emergencies in the case of adults, while making more
services available to children in welfare households.---* In other provinces, it's the provincial
government that decides what health/dental services will be offered to people
in welfare households throughout the jurisdiction. As in Ontario, the range
of benefits is often limited to emergency care for adults, but there are
more preventive services available for kids in welfare households.

---

Working Joe makes too much money and is not eligible for welfare.
Working Joe pays $500.00 per month for food, or $6,000.00 per year.
Working Joe now has $18,031 net.
Welfare Joe has no documented income and is eligible for welfare.
Welfare Joe still has $31,200.00 net.

Recapping from above:
* Working Joe makes $52,000 gross per year, which leaves him with $42,200
after federal and provincial tax.
* Welfare Joe makes $$23,000 per year in PEI, the most generous province.

Curiously, in the "food" example
above, Working Joe's annual income is reduced by the $6,000 he paid for
food, but Welfare Joe's income remains the same. Apparently, Welfare Joe
should give Working Joe some tips on how to stretch his food dollar.<hint of sarcasm.>

---

Working Joe pays rent of $1,200.00 per month, or $14,400.00 per year.
Working Joe now has $9,631.00 net.
Welfare Joe receives a $500.00 per month federal rent subsidy.
Welfare Joe pays out that $500.00 per month, or $6,000.00 per year.
Welfare Joe still has $31,200.00 net.
Working Joe pays $200.00 per month, or $2,400.00 for auto insurance.
Working Joe now has $7,231.00 net.
Welfare Joe says, "We don't need no stinkin' insurance!" and still
has $31,200.00 net.

There is no "federal rent subsidy".
The $660/mo. maximum shelter
allowance for a four-person family is included in the $23,000 total annual
welfare income as noted above, and no additional amount is received for
shelter from any source.

Some welfare families (about 10-12%) live in
subsidized housing, where their shelter cost is equal to 30% of their maximum
monthly welfare benefit. The shelter portion of their welfare cheque is
then reduced so that it covers only the actual cost of shelter.

The real advantage in acquiring a place in
social housing in my province is that Ontario Works pays a maximum monthly
shelter allowance of $660 for a four-person household, an amount that's
included in the same cheque as the family's monthly support allowance ($429).
The shelter allowance *may* be adequate to house four people in a rural
or remote or sub-standard setting, but in an urban context, $660 doesn't
even rent a studio apartment anywhere, let alone an apartment for four in
a decent neighbourhood.

For each dollar above the $660 shelter portion
of the welfare cheque that's spent on shelter, there's a dollar less for
food and other necessities of the family. Many welfare households living
in the private market are paying out 60-75% of their total welfare cheque
on shelter. In fact, Welfare Joe's TOTAL monthly welfare allowance (just
under $1,100) is $100 less than the amount that Working Joe pays out in
rent alone.

As he did for food costs above, the writer
of this rant errs in saying that Welfare Joe still has $31,200 net after
paying shelter costs. Not so - Welfare Joe's income is reduced when he pays
for his family's shelter, just like Working Joe.

Also, it's possible that Working Joe's getting
stiffed on his $200/month car insurance premium. Unless he drives a late-model
high-end luxury car or he's been convicted of drunk driving, the premium
he's quoting is right out to lunch. Besides, most families on welfare can't
afford to own a car. And, just for the record, even if Welfare Joe does
own a car, he can't say that he "don't need no stinkin' insurance,
because it's the law --- Every province has a minimum auto insurance coverage
law. Of course, the rant author *could* be implying Welfare Joe and his
kind would drive a car even without insurance AND knowing that it's illegal.

---

Working Joe has to make his $7,231.00 stretch to pay utilities, gasoline,
etc.
Welfare Joe has to make his $31,200.00 stretch to pay utilities, buy gas,
prepaid cell phone card, (alcohol/cigarettes) and play at the Casino.

...and, while you're tarring everyone on welfare
with the same brush, don't forget the holidays in Florida and the 60"
plasma TVs!

Working Joe now works overtime on Saturdays or gets a part time job after
work.
Welfare Joe has nights and weekends off to enjoy with his family & friends.

Working Joe and Welfare Joe's children attend the same school.
Working Joe pays for his children's lunches while Welfare Joe's children
get a government sponsored lunch.

And we wouldn't want kids to have a nutritious
lunch so they can learn and grow into God-fearing, tax-paying citizens like
"us", eh?

Working Joe's children go home after school, while Welfare Joe's children
have an after school ESL program provided free.

...and we definitely don't want them learning
our language and taking our jobs, now do we?

Working Joe and Welfare Joe both enjoy the same police and fire services,
but working Joe paid for them with his taxes and Welfare Joe did not.

Do you get it, now?
If you support any politician that supports our welfare system, you are
part of the problem!
It's way PAST time to take a stand for Canada and Canadians!!

*************************************

Comment by Gilles:

The Working-Joe-vs-Welfare-Joe argument is
as old as welfare itself, the first evidence of which dates back to the
Roman Empire.

One of the basic tenets of the English Poor
Law of 1834 was the principle of 'less eligibility' : to discourage people
from applying for poor relief in those days, the legislation stated that
working conditions in the workhouse (where poor relief was earned) had to
be worse than the worst job possible in the outside labour force. In more
recent times, the philosophy has evolved (mercifully...) --- the principle
of less eligibility means that a person should always be better off in the
paid labour force than on welfare. The National Council of Welfare's series
of reports entitled Welfare Incomes explores the subject thoroughly, and
it includes comparisons of welfare incomes with average incomes and other
income benchmarks. Their finding: In ALL Canadian provinces and territories,
the gap between the maximum welfare assistance available and the income
from a minimum-wage job is a strong incentive for people to stay in the
work force, if they can.

Scandinavian Working
Joes understand that Welfare Joe is "there-but-for-the-grace-of
God go I..." , and thus support for welfare state programs is strong.
In Canada, we've tended historically toward a Scandinavian-type welfare
state, but the American self-sufficiency model of welfare --- tougher to
qualify, lower benefits, welfare bashing, etc - seems to be prevailing in
Canada since the mid-1990s.

The irony of it is that the loudest welfare
bashers and critics of the system are often the blue-collar workers in fragile
industries who are but one or two paycheques away from financial ruin themselves.
Andrew Coyne, national editor of Maclean's Magazine, summed it up best when
he (the social and fiscal conservative) said something like : "The
ideal welfare system is the best one that could be in place if I were ever
to need it."

Related links

Canadians
precariously close to financial instability, study finds
September 13, 2010
Six out of 10 Canadians are living paycheque to paycheque and most are one
pay slip away from financial instability, according to a new study. On Monday,
the Canadian Payroll Association reported that of 2,700 Canadians surveyed
59 per cent are stretching their pay to the limit and expect they would
be in financial difficulty if their pay was cut or delayed by one week.
That figure is unchanged from last year. Dealing with debt is also top of
mind, the study showed. (...) In May the
Certified General Accountants Association of Canada reported that the
amount of household debt across the country reached a new high of $1.41
trillion in December 2009. About six out of 10 Canadians said even though
their debt load had increased they felt they could manage it or take on
more.
Source:Toronto Star

Related links:

Canadian
Workers living from paycheque to paycheque
Employees worried about the economy, debt and retirement (PDF - 1.3MB,
35 pages)
August 2010
TORONTO (September 13, 2010)  A major national survey of working Canadians,
released today, shows that employees continue to live paycheque to paycheque.
They are concerned about how interest rates and the economy will affect
their personal finances and retirement.
Source:Canadian Payroll Association
The Canadian Payroll Association (CPA) has been representing employers
payroll interests since 1978, through its mission of Payroll Leadership
through Advocacy and Education and its values of Community, Professionalism
and Authoritative Knowledge

COMMENT:

Plus ça change, plus c'est la même
chose.*
[*Translation: http://tinyurl.com/2fenacz
]
In 1995, the federal government announced that the Canada Assistance Plan
(federal cost-sharing of approved welfare costs) would be terminated in
April 1996 in favour of the Canada Health and Social Transfer, a block fund
that would see less federal cash flowing to the lower order of government
for welfare. In return, there would be no conditions for the cash from Ottawa
except for a ban on a residency requirement for welfare eligibility purposes.
---
For links to more detailed information about the transition from CAP to
CHST, go to the
Canada Assistance Plan / Canada Health and Social Transfer / Canada Social
Transfer Resources page:http://www.canadiansocialresearch.net/cap.htm
---
I was employed as a researcher in the federal government at the time, and
I was invited in the summer of 1995 to attend a roundtable with some academics,
some NGO people and some labour movement reps in the boardroom of the National
Council of Welfare here in Ottawa. Over the course of a day-long session,
the group discussed what national standards Ottawa might/should impose on
the provinces and territories to qualify for federal contributions to provincial/territorial
welfare costs. I can't recall any great resolutions being crafted or a plan
being hatched --- but I do remember a senior person from a national union
stating bluntly that the majority of her union's rank and file were one
or two paycheques away from financial crisis. And yet, she said, her union
members were consistently and viscerally critical of people on welfare and
how generous they perceived the welfare system to be. That's what we're
fighting in our own union, she said - the power of the right-tilting media
that can influence many rank-and-filer union members to trash the very system
that would be there to help them if they were destitute.
I don't think things have changed much.
Pity.

----------------------------

[The section immediately below
was added on October 28, 2010)

*******

So why do we need welfare, anyway?

"Arguments for welfare

The basic arguments for collective provision are:
* humanitarian. Concerns about poverty and need have been central to many
developments.
* religious. Several of the world's major religions make charity a religious
duty. Beyond charity, Catholicism recognises a duty of social solidarity
(or mutual social responsibility); Judaism, Islam and Lutheran Christianity
require collective responsibility for one's community.
* mutual self-interest. Many welfare systems have developed, not from state
activity, but from a combination of mutualist activities, gradually reinforced
by government.
* democratic. Social protection has developed in tandem with democratic
rights"

The poor and the disadvantaged have been around
since the dawn of time, and they're not about to go away soon. Welfare programs
were conceived centuries ago, and the social safety net remains an important
part of our modern democratic society
here in Canada, as a means of ensuring that everyone is entitled to a minimum
share of our national wealth to provide themselves with the essentials for
survival.

The people who send "joke" emails
containing blatant errors and falsehoods like the Working Joe - Welfare
Joe email are often found in line at the welfare office, after their job
in the automobile industry has disappeared and they've run out of Employment
Insurance. Ironic then that they should be so venomous when referring to
a system that would be there in their own time of need...

The bottom line : Always check your facts before
going off foaming at the mouth because of some crap you read in an email.

To search the complete
Canadian Social Research Links website ,
use the text box below:

To search ONLY the page you
are now reading,
use Ctrl + F to open a search window.

SUBSCRIBE
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